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attention and study. In general they show a tendency to lag some'what behind the urban systems in their recovery from the effects of the war and the industrial depression. The reasons are readily apparent.

When general business lags interurbans lose both passenger and freight revenue. Motor bus competition also affects both of these sources of interurban revenue. Again, the interurban has not the monopoly of its business that the urban lines have; there is always the competition of the steam railroads and fare increases are limited by this competition.

In spite of these conditions, however, the interurbans are holding their own and discharging well their obligations to the public and better times for them is: anticipated.

Piratical bus and jitney competition still is making inroads on receipts, but it gradually is being put under proper restraint. All that the industry is asking is that buses be made to pay their fair share of transportation burdens in the way of taxes and otherwise controlled as are electric railways. Once this is accomplished there no longer will be a bus problem, for they cannot survive, as has been proved many times. The only reason bus owners are operating at a profit now in most communities is that taxpayers are providing them with every requirement for running except cars and drivers.

Regulation invariably follows education as to the facts regarding buses. Twenty-three states now classify them as common carriers and more cities are regulating them daily. The time is not far distant when all buses will be classified as common carriers, as they should be now.

The industry's public relations are better than they ever have been before in its history and this is directly traceable to frank dealings with the car rider. The oft-repeated statement that once the public knows the truth it will deal fairly with our industry has been demonstrated anew in many quarters during the last year. We have told our story through our executives, our men, our advertisements and other channels and we have profited thereby. Honest newspapers everywhere are helping electric railways get back on their feet and dishonest ones are finding their efforts to wipe out electric railway service merely boomerangs which hit them in the pocketbook when, in isolated cases, they are able to mislead the public into putting car lines out of business temporarily. Our only danger from publicity is that in the face of prosperity we shall neglect to keep the public informed regarding our activities. No greater mistake could be made.

Tremendous financial problems, however, still are before us. Much new money must be raised through the sale of securities in the next few years to put our properties back on a pre-war basis of efficiency. This new money must come from investors and it will come only if we steadily gather momentum toward the goal of sustained prosperity. If our earnings continue to increase, thanks to operating economies and fair treatment by the public, there will be no difficulty in bringing money back into our industry. A start toward new financing already is being made and more will follow if we continue to go forward as we have in the last seven months.

Our business is that of supplying transportation the public. Years ago we did it with horse cars. Prior to that time we had omnibuses drawn by horses or mules, and before that, the stage coach. Now we are doing it with electric cars: Possibly in the future we shall utilize additional agencies; whatever vehicles may be called into service there is no question in the mind of any student of economics or any observer of the development of communities but that chaos would follow should there be any considerable number of competing transportation companies within a given area. Through its long years of experience the electric railway industry is preëminently fitted to provide for the transportation wants of the people. It behooves all of us to keep in close touch with every new development that enters into the transportation business and to adapt to our purposes the best of the new developments. In addition to this the public must be informed of the evil consequences of any move that would weaken the electric railways and hamper them in providing the service the people demand.

In aiding us to serve the public the service which the American Electric Railway Association can render is invaluable. Perhaps all of us do not fully realize how great is the amount of general information, statistics and other matter which the Association makes available to the membership. I venture to say that if any one of the member companies attempted to get together the information which is obtained and distributed by the Association it would find the cost prohibitive, but by co-operation we are able to supply a service that is beyond question indispensable. I believe there should be greater utilization of the Association on the part of the membership, and in this connection let me say that member companies should bear in mind that the Association functions efficiently only to the extent that they co-operate to make it successful. When you seek information from the Association you find it glad to give it to you; when the Association goes to you for information you should be equally glad to give it to the Association, for the benefit of the entire industry. If the organization is to be of the utmost value, member companies must respond gladly and promptly to all requests which the Association makes, just as the Association gladly and promptly responds to requests from member companies.

Another agency for great good within the Association is our monthly magazine AERA. I think most of us agree that Area today voices the ideals and aspirations of the membership of the Association. The character of its contents is very high, and it is of practical value to everybody who has at heart the best interest of the industry. Not only does it reflect the condition of the industry, the trend of the times and supplies us the detailed information of what the Association is doing, but we may well look to it to direct our thought in matters that concern our own welfare and that of the public.

We should not forget that our Association is made up of individuals as well as companies and executives. The interest which the individual has in the industry is as great as that of the executive, and we should leave nothing undone which would enhance the interest of the individual in his chosen work. The magazine offers a means of amalgamating the interests of executives, manufacturers, engineers and the various individual members. It gives us all the news of the Association, it reveals the proper perspective of the industry and supplies us with material for thought. It should be widely distributed among the men in supervisory positions — company members will find it worth while to subscribe for copies for all employes who desire to increase their usefulness. The services of a new editor were secured a few months ago, and we hope and expect that the magazine will prove to be of ever increasing interest and value to all its readers. Executives and manufacturer members have told us that AERA is better and more useful than it has been, and there is a very cordial feeling toward it on the part of our manufacturer members, who recognize the great value to the industry which the magazine possesses.

May I add my emphasis to the recommendation of the Committee on Publications that all of us do our utmost to co-operate with the editor of AERA to the end that the interests of the industry may be better served and the Association be provided with strong, authoritative organ, capable of voicing sane opinions and assuming a position of wise leadership.

The work of the Advertising Section of the Association will be handled in detail in other reports, but I cannot refrain from adding my endorsement to the work that it is doing. I believe that our public relations are better for this department and I am sure that the special service which it renders companies having advertising problems is valuable. Under no circumstances should its work, now so well under way, be permitted to stop. Rather the functions of the Section should be broadened, for public relations work will become more important in our industry constantly henceforth.

I may be pardoned in repeating that our industry comes in closer contact with the people than any other that I know of. For that reason our problems are discussed more generally by the people. It therefore is our duty to keep in close touch with the desires of the public, not only that we may know what the public wants, but that we may be in a position to inform the car riders of insidious developments that in time may destroy their transportation facilities.

This is an era of careless thinking. People read the headlines – and too often they are flashy and sensational — without giving study to the text. They are prone to accept as truth casual remarks made by uninformed or prejudiced persons. Demagogues are abroad, misleading

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the multitude. Is it strange then that in some parts of the country there is not that understanding between the utilities and the public which is so necessary for the proper service of the people as well as for the preservation of the utility industry?

I hesitate to make recommendations, because my term of office is ending, but my experience as President of the American Electric Railway Association makes me feel that I should urge upon everybody in the industry to do his utmost to inform his patrons of the basic facts relating to our business.

First of all the public must realize that it is impossible for several competing forms of public transportation to prosper in any given community. It is as foolish to permit unprofitable and destructive competition in public transportation as it would be to have several postal systems competing for business. The people insist that there shall be one post office because they know that one service of this kind can serve them best. In some places they are not yet aware that unregulated and improperly taxed automobile competitors of the established electric railway companies are tending to deprive them of the reliable, dependable and inexpensive service which the electric railways have given. They do not realize that once the electric railways are weakened or destroyed there will be no incentive to re-establish them. Every experiment which has been tried has proved that motor vehicles are absolutely inadequate to handle mass transportation, and there is no chance that future experiments will show anything different.

I would recommend that members of this Association take their stories to the people. I would recommend that no opportunity be lost to reveal to the people the gross inequalities that exist with reference to taxation and other public charges as between motor vehicles operating in the streets and the railways.

We are all aware that the lower fares can be kept without diminishing a proper return upon the investment in the properties, the better satisfied the public will be. Yet, fares cannot be brought lower than a sum that includes all the costs of giving the public adequate service and a fair return from the investment. When unfair competition impairs the earning power of the railways, service must either be diminished or fares increased. There is no escaping this fact. Therefore, the public's interest in preventing parasitic competition is just as great as ours. Fares will be lower in proportion to the reduction of charges for paving and other public obligations, the lessening of the cost of fuel and labor, and the increase in income due to increased patronage. It follows that as costs are increased the fare must increase. This is economic law — there is no escaping it.

In conclusion I wish to thank most sincerely the officers, Executive Committee and members generally for their hearty co-operation and splendid support during my term of office as President of the American Electric Railway Association. To the Executive Committee I am particularly indebted for their efficient work and faithful attendance at the monthly meetings where so many important matters affecting our industry were considered.

The year just closing has been a most eventful one in the industrial world. Two of the greatest strikes in the history of our Country have seriously impeded the constructive work which should have gone on uninterruptedly during these days following the great World War. Happily, however, these disputes appear to be in a fair way of settlement. Let us hope that they will be settled right -- not as mere expediencies but on a sound permanent and economic basis.

While the past Executive year has been an extremely busy one for me, it has nevertheless been a most pleasant and satisfactory one on account of my very happy and cordial associations and the unwavering loyalty and support accorded me at all times by the officers and members of the Executive Committee, as well as that of the entire membership of this Association. I will turn over the gavel to my successor, wishing him a most successful term of office, and for our great industry, the most unbounded prosperity.

PRESIDENT TODD :- The next order of business is the Report of the Executive Committee.

SECRETARY WELSH - Mr. President, the Report of the Executive Committee consists of the minutes of the twelve meetings of the Committee held during the year. These will be printed in abstract form in the proceedings.

PRESIDENT TODD –We will dispense with the reading of the Report of the Executive Committee if that meets with the approval of the Convention.

ANNUAL REPORT OF THE EXECUTIVE COMMITTEE

To the American Electric Railway Association:

GENTLEMEN : - Your Executive Committee begs to submit its report as follows:

Meeting of October 6, 1921 THERE WERE PRESENT : Messrs. R. I. Todd, J. N. Shannahan, L. H. Palmer, C. L. Henry, W. H. Sawyer, B. I. Budd, Caryl W. Ely, L. E. Gould, R P. Stevens, George H. Tontrup, F. R. Coates, J. G. Barry, C. R. Ellicott, G. Harries, P. H. Gadsden, H. V. Bozell and the Secretary, Mr. J. W. Welsh.

On motion of Mr. Coates, Mr. James W. Welsh was elected Executive Secretary of the Association for the coming year at the same rate of salary as at present.

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